Two more Form 12/ROS questions

[usrbin]

Please help!
1. The old chestnut of Increased SR cut-off vs Home Carer's. I know you can only claim one or the other, and would prefer to use the former. But it seems to me that the Increased Cut-Off is only applicable if both spouses are working... or is it if both spouses have incomes? My wife received some UB in 2006 but otherwise was at home with our child i.e. she was not working. Can we claim it?
(As an aside, if both spouses are working, then how can they claim Home Carer's Credit - after all, they're both working, not minding the baby )

2. PRSI/Health: I spent the first half of 2006 (approx) in PAYE employment and the latter half contracting. Presumably then my PRSI/health levy was paid by my employer - so for the imminent 2006 tax return, how do I calculate the outstanding amount?
Do I work out the proportion of my gross income which was earned outside of PAYE and just add 5% of that to my final tax liability?
Also, do I need to pay preliminary 2007 PRSI and health?

Thanks, as ever.

 

[ClubMan]

1. The old chestnut of Increased SR cut-off vs Home Carer's. I know you can only claim one or the other, and would prefer to use the former. But it seems to me that the Increased Cut-Off is only applicable if both spouses are working... or is it if both spouses have incomes? My wife received some UB in 2006 but otherwise was at home with our child i.e. she was not working. Can we claim it?
(As an aside, if both spouses are working, then how can they claim Home Carer's Credit - after all, they're both working, not minding the baby )

Are you sure that you're not overcomplicating things here? Assuming that you are on joint/aggregated married taxation then you just stick down your earnings and her UB "earnings" (UB is assessable for income tax) and they work out your SRCOP issues. Then, if the UB collected is under a certain limit you also get the Home Carer's Tax Credit (in part or full). See [broken link removed]:

The Home Carer’s Tax Credit may be claimed by a married
couple where one spouse (the “Home Carer”) cares for one or
more dependent persons. If the Home Carer has some income in
his/her own right, the tax credit may still be claimed. Only one tax
credit is due irrespective of the number of persons being cared
for.

...

What are the conditions?

The conditions, which must be met, are as follows:

• A married couple must be jointly assessed to tax - it does not apply where married couples are taxed as single persons.
• ...
• The Home Carer’s income must not exceed €5,080 for the
  tax year 2007. Where the income is between €5,080 and
  €6,620 some measure of relief will still be given.

2. PRSI/Health: I spent the first half of 2006 (approx) in PAYE employment and the latter half contracting. Presumably then my PRSI/health levy was paid by my employer

I would not presume this. Are you sure that you might not be self assessed for that year and responsible for your own tax/PRSI?

 

[usrbin]

Are you sure that you're not overcomplicating things here? Assuming that you are on joint/aggregated married taxation then you just stick down your earnings and her UB "earnings" (UB is assessable for income tax) and they work out your SRCOP issues. Then, if the UB collected is under a certain limit you also get the Home Carer's Tax Credit (in part or full).

I very probably am overcomplicating things! However surely I need to do all the math myself, in order to remit a cheque to the correct amount, along with the Oct 31-deadline form... ? So I'm trying to have all the figgerin' done in advance. Having said that, it turns out that the Home Carer's credit is actually more beneficial to us, as we're not very far into the higher tax band for 2006, so I'll just add that E770 to my credits. (NB the first E13pw of UB isn't counted for tax purposes, FWIW)

I would not presume this. Are you sure that you might not be self assessed for that year and responsible for your own tax/PRSI?

Well, I have a P45 from end-June 2006 which shows "PRSI - this employment only" including a figure for "Employee's Share" - I'm hoping this is the money which came out of my wages towards paying my PRSI obligation for those six months.

Still on PRSI/health, do I have it right (sorry, dumb question) that it's a simple 5% of gross income? And that I have to make a later, separate application to get a portion of that PRSI % back from the PRSA contribution which I made recently? Or do I reckon that 5% against my taxable income?

Thanks for all the help